The Federal Trade Commission (FTC) and the New York Attorney General have filed a complaint  charging two companies and their owners with collecting phantom debts that  were not owed by consumers.

The complaint describes a type of fraud that’s common in the debt collection industry. Phantom debt collection is “the practice of pressuring people to pay debts they don’t owe.” If a debt collector contacts you about a debt you don’t recognize, never assume you owe it and don’t make payments until you’re sure you do. The debt collector may have received information that incorrectly identifies you as the debtor. Or the debt may have been fabricated by a scam artist who had your bank account and Social Security numbers. Some scammers aggregate phantom debts into a portfolio and then sell the portfolio to debt buyers who then try to collect the debts.

The FTC’s complaint  charges one defendant , Hylan Asset Management, LLC, with buying, selling and placing “phantom debts” for collection with several  different debt collection agencies.  According to the FTC,  Hylan knew these debts were fake because it bought many of them from two individuals the FTC had previously banned from the business of debt collection. Despite this knowledge, Hylan continued to buy phantom debts from these two individuals and then place them for collection. In doing so, Hylan provided the debt collection agencies with the “means and instrumentalities” to collect phantom debts.

The FTC also charged one of the debt collection agencies, Worldwide Processing Group, LLC, with collecting phantom debts it received from Hylan. According to the FTC, World Processing knew or should have known these debts were not owed, but still tried to collect them from consumers. Worldwide also engaged in other unlawful debt collection practices, including threatening and harassing consumers’ friends and family members and failing to provide consumers with certain statutorily-required notices describing how they could dispute the debts.

The post FTC Charges Two Companies With Collecting Phantom Debts appeared first on Law Office of Robert Scarino.